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HowtoStopIRSFromTakingYourPassport Ebook PDF
HowtoStopIRSFromTakingYourPassport Ebook PDF
Once the State Department receives certification of a tax debt from the IRS, it forces the
State Department to discontinue issuing or renewing the taxpayer’s U.S. passport.
But that’s just the tip of the iceberg! The State Department may also fully revoke your
existing passport!
Upon receiving certification, the State Department will deny your passport application
and/or may revoke your current passport.
Your passport can be revoked both when you are in the country and when you are
traveling overseas. For example, you could be on a trip to Europe and the government
could revoke your passport not allowing you to return to the United States.
This new collection method was put into place as part of a larger effort to collect unpaid
debt. Last year, the IRS reported over $400 billion owed in assessed taxes, interest and
penalties, also known as the Tax Gap. This significant amount of delinquent debt has
contributed to the overall national debt leading the IRS to get repeatedly cited.
The new bill dates back to 2012, when the Government Accountability Office first
reported on potentially using passports to collect taxes. When the idea was first
proposed, it created some controversy within Congress; however, when the bill was
presented this time, it was packaged within a larger highway funding bill and passed
without any issues.
Some people find the new bill to be controversial, as passports may be required for
domestic travel beginning soon. After September 11th, 2001 the United States issued the
Real ID Act, which was put into place to tighten access to federal facilities. Part of the Real
ID Act created a national standard for state-issued IDs; however, four states, Louisiana,
Minnesota, New Hampshire and New York did not comply, potentially making their IDs
no longer valid for domestic flights.
This means individuals from these states must use their passports to fly within the United
States, which creates an issue if passports are revoked for tax debt issues. In addition to
the four states listed above, the Los Angeles Times reported that 26 states, including
California, do not meet the federal ID regulations. These states have must comply with
the new regulations or residents from those states may also need passports to travel
domestically.
Taxpayers are starting to feel the change. At least one person paid $1 million in overdue
taxes to avoid having their passport denied, according to a recent Wall Street Journal
article. As of June 2018, at least 220 people have paid a total of
$11.5 million in overdue debts, according to the Journal.
Additionally, a passport won’t be at risk under this program for any taxpayer:
• Who is in bankruptcy
• Who is identified by the IRS as a victim of tax-related identity theft
• Whose account the IRS has determined is currently not collectible due to hardship
• Who is located within a federally declared disaster area
• Who has a request pending with the IRS for an installment agreement
• Who has a pending offer-in-compromise with the IRS
• Who has an IRS accepted adjustment that will satisfy the debt in full
The IRS will make this reversal within 30 days and provide notification to the State
Department as soon as practicable.
The IRS will not reverse certification where a taxpayer requests a collection due process
hearing or innocent spouse relief on a debt that is not the basis of the certification. Also,
the IRS will not reverse the certification because the taxpayer pays the debt below
$50,000
But Not So Fast!
You Cannot Sue If The IRS Makes a Mistake
The State Department is held harmless in these matters and cannot be sued for any
erroneous notification or failed decertification under IRC § 7345.
IRC § 7345 does not provide the court authority to release a lien or levy or award money
damages in a suit to determine whether a certification is erroneous. You are not required
to file an administrative claim or otherwise contact the IRS to resolve the erroneous
certification issue before filing suit in the U.S. Tax Court or a U.S. District Court.
If you need your U.S. passport to keep your job, once your seriously delinquent tax debt
is certified, you must fully pay the balance, or make an alternative payment arrangement
to have your certification reversed.
Once you’ve resolved your tax problem with the IRS, the IRS will reverse the certification
within 30 days of resolution of the issue and provide notification to the State Department
as soon as practicable.
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Keith@KeithJonesCPA.com
KeithJonesCPA.com
Keith@KeithJonesCPA.com
KeithJonesCPA.com